Follow the Surplus: European Consumers Embrace Online Media

By David DeanCenk Sezginsoy, and Paul Zwillenberg

European media consumption is moving online, and economic value is following. Consumers already value online and offline media nearly equally, a notable development given the relative youth of the online market. The increasing penetration of smartphones and tablets, the rollout of high-speed data networks, and the expanding availability of high-quality content will likely accelerate the march online in the next few years.

This trend has important implications for media companies, which are facing significant opportunity as well as substantial disruption in long-standing business models. It also has important implications for policymakers, who are debating newly consequential issues at the intersection of law and technology. The impact will also be felt by others, among them computer and device manufacturers, telcos, and ad agencies, to name a few.

A new study by The Boston Consulting Group has found that in nine European countries, 40 to 60 percent of the perceived value that consumers get from media—net of associated costs—is derived from online media. In a growing number of media categories and countries, the “consumer surplus” from online media now exceeds that from offline. Europeans are consuming more (and higher-quality) media through an expanding variety of connected devices, including smartphones, tablets, e-readers, and Internet-enabled TVs.

This report examines this remarkably fast rise by taking a detailed look at nine countries that both broadly represent the makeup of Europe today and embody very different attitudes toward the Internet. The countries span various stages of economic development and online maturity. They cover the large economies of France, Germany, Italy, and the U.K.; smaller to medium-sized countries (Ireland, the Netherlands, Sweden); and more-recent EU members, the Czech Republic and Poland.

The report is based on consumer research conducted from November 2012 through January 2013; it builds on prior analyses of the Internet’s economic and business impact, which are contained in other reports in BCG’s Connected World series. (Follow the Surplus: How U.S. Consumers Value Online Media, the most recent of these—published in February 2013—explores the consumer-led changes taking place in the online media industry in the U.S.)

In our view, the shift underway is significant, structural, and substantially beneficial for consumers and the industry alike. However, fast-paced change inevitably creates complexity in decision making by leaders in both business and policy. In this instance, consumers have a clear message for all concerned: they like what is happening, and they want more of it.